Despite its disruptions, the pandemic proved to be good for consumers’ debt levels. The various forms of stimulus available after 2020 kept debt artificially low, and even low-income consumers were solvent. Those programs have now reached their sunset phase, and debt is rising: by March of 2024, for example, credit card delinquencies and charge-offs hadn’t just returned to pre-COVID levels but had in fact reached a 12-year high.
Resurgent debt means resurgent demand for debt collection and recovery, but collections have become more complicated on a number of fronts. Advanced search tools like Spokeo for Business provide a powerful new tool to meet those challenges. In this article, we’ll explore how.
The Challenges of Debt Collection and Recovery
Compliance remains one of the biggest challenges within the debt collection and recovery industry. While bedrock legislation such as the Fair Debt Collection Practices Act (FDCPA) sets a national baseline governing collections activity, new legislation such as Minnesota’s proposed Debt Fairness Act or individual court decisions can still require companies operating in specific jurisdictions to be aware of, and adapt their procedures to, local conditions.
A representative sampling of other ongoing challenges might include:
- Hard-to-reach debtors who stonewall or actively evade contact, which, thanks to tools like caller ID, the shift away from landlines, and spam filters is easier than ever.
- Debtor information available through current resources is outdated or incomplete.
- Lack of resources – financial, technological, or staffing – and correspondingly high workloads.
- The need for greater speed and efficiency in collections.
- Changes in consumer expectations. Research from consulting firms such as McKinsey has shown that consumers expect personalization from companies they do business with, and find a lack of personalization to be jarring. While debt resolution is not a consumer product or service in the conventional understanding of the term, this expectation should not be overlooked.
Given the importance of debt recovery to creditors and to the economy as a whole, it’s unsurprising that there’s a thriving market for tools that help with skip tracing and debt recovery. Spokeo for Business is a powerful addition to that market.
The Limitations of Conventional Skip Tracing Tools
Companies specializing in the skip tracing market, or debt collection and recovery, have a few large bodies of data to draw from. One is open source intelligence, or OSINT, a broad term for information that’s available from public sources. This includes the kind of information that’s available through a simple Google search, as well as other sources ranging from public posts on social media to courthouse records.
A second body of information consists of sensitive information that’s not available to the general public. This is regulated data, such as Social Security Numbers and dates of birth, which are protected by law because of their sensitive nature and the potential for misuse. Skip tracing and data collection tools typically draw from both pools of data, and may include access to proprietary or first-party information that’s not available from other sources.
These tools are very useful, but they also have some sharp limitations. Their reliance on proprietary data means you may need multiple costly subscriptions in order to recover debts effectively. Their data is often out of date, slowing your recovery efforts. Collating information “siloed” across multiple vendors can be a challenge for your staff, slowing recovery and driving up costs. Their search interfaces can be arcane and confusing. Overcoming all of this, and turning it into actionable intelligence in a timely and cost-effective fashion, is not always easy.
How Advanced People Search Connects the Dots
Spokeo for Business provides a potent combination of both regulated and unregulated data, aggregating billions of data points from OSINT sources and select data partners. The product provides a fast, intuitive, cost-effective way to aggregate OSINT and regulated data from across multiple sources, and to deliver both searches and detailed reports within a single, easy-to-use interface.
Another key differentiator is the depth and power of Spokeo’s social media search. The company was founded originally as a social media aggregator, and remains a leader in that field. No matter how elusive your debtors, if they’re active online Spokeo will usually find them.
Learn more about what makes social media is crucial to modern skip tracing & collections in this article.
Using Spokeo for Business in Debt Collection and Recovery
Spokeo for Business can be a powerful tool for collections at any scale, from a neighborhood business without dedicated collections staff to professional collections agencies and financial institutions.
Let’s look at some of its key capabilities, and how they can help you meet challenges like those we’ve previously identified.
Easy Searches and Reporting
Spokeo’s interface is simple and intuitive enough that staff will require minimal training to conduct searches, and save, print or share reports. Trained staff are also available 7 days a week to assist with onboarding, or with especially complex searches. Whatever the resources at your disposal, Spokeo for Business can help you maximize them.
Administration and Team Management
Whether you administer a crew of seasoned professionals or an ad-hoc group with other responsibilities, Spokeo’s simple dashboard makes it easy to add and drop members, monitor searches, call up past reports, and much more. This aids in transparency and compliance, making it easy to document the provenance of any data used for collections purposes.
Powerful Application Programming Interface
In well-funded enterprises with IT staff, Spokeo’s powerful APIs enable aggregation of data between Spokeo and your existing tools, removing a significant barrier to the free flow of data. Note that the API currently provides access only to unregulated information, but API access and batch delivery are in the works for regulated data as well.
Continuously Updated Data, More Accurate Identification
With Spokeo you’re not buying a pool of static data. New phone numbers, addresses and other information flow into our databases constantly, and simply show up in each new search.
Ambiguity and misidentifications are a constant irritation in collections, and Spokeo for Business helps you meet your legal obligation to avoid them. Where there’s ambiguity, Spokeo’s reports furnish not just the names and locations of potential matches, but of family members, address and phone number history, birthplace, and current social media activity, which can be used to help verify that the information matches that of the debtor, or provide alternative methods of contacting them. Armed with that, your tracers will usually have little difficulty identifying the correct person, no matter how common their name.
Personalizing Approaches to Consumer Debtors
Response rates for demand letters, phone calls and other one-size-fits-all approaches are predictable, and there’s room for improvement. Research cited by InsideARM found that simply approaching debtors through their preferred channel improved payments by 10 percent. The McKinsey research cited earlier suggests that personalizing those approaches to the debtor can bring further improvements, especially if paired with initiatives to lower friction in the payments process (those are outside the scope of this article).
Spokeo’s ability to piece together a fully rounded overview of individual debtors is difficult to duplicate with other data tools, and makes it possible not only to personalize approaches to debtors, but to do so efficiently.
Identifying and Locating Collateral
Debtors often conceal property that’s been used as collateral against a loan. Homes can’t readily be moved or hidden, but cars, equipment, and other valuables certainly can. Even the wariest of debtors seldom stop posting on social media, so Spokeo’s powerful social media profiling can help you find their posts, gain intel on their current location and place of business, and sometimes even identify specific items of collateral from their photos.
Locating the Unbanked or Underbanked
Those with minimal exposure to the banking system haven’t historically had much access to credit, but the rise of non-bank lenders, rent-to-own retailers and secured loans or credit cards has changed that. Traditional data services serving the debt recovery and skip tracing markets lean heavily on banking data, which is little use in this demographic. Spokeo’s social media enriched content fills in that blind spot, making it easier to locate those hard-to-find debtors; who – according to a 2021 study by the FDIC – may account for almost 1 in 5 households.
Empower Your Debt Collection and Recovery Efforts
Making the skip tracing process as effortless as possible speeds recoveries and makes them more cost-effective; reduces strain on budgets, IT resources and staffing; and even helps debtors by restoring contact with creditors before their financial situation can deteriorate further.
Adding Spokeo for Business to your collections arsenal won’t be a budget-breaker either, even for the smallest of companies. Subscriptions can be tailored to the needs of enterprises at any size, from mom-and-pop retailers to major corporations, and they can be adjusted as your needs change.
For further details, or to arrange a demonstration or no-cost trial of the product, contact us through the Spokeo for Business page.
Fred Decker is a prolific freelance writer based in Atlantic Canada, with articles appearing in print and online since 2007. He writes primarily on technology, personal finance, and food and foodservice, drawing on previous careers in those industries. He was educated at Memorial University of Newfoundland, Nova Scotia Community College, and the Northern Alberta Institute of Technology.
Sources
InsideARM: Credit Card Charge-offs and Delinquencies Reach 12-year Highs
US Federal Trade Commission: Fair Debt Collection Practices Act
InsideARM: Restrictive Collection Bill Pending in Minnesota
McKinsey & Company: The Value of Getting Personalization Right – or Wrong – is Multiplying
US Federal Deposit Insurance Corporation: 2021 FDIC National Survey of Unbanked and Underbanked HouseholdsInsideARM: How Consumer Credit Trends Impact Collections in 2024